The best way to win an auction online is to wait as late as possible in the auction before submitting a bid, a method scientists have unsurprisingly discovered works best.
You’ll never find an auctioneer in real life who will stop the auction at a preset time with bidders clamoring to bid more, but online auctions on eBay do this regularly. Although there is no way to connect auction sniping with the rise in “Buy It Now” sales on eBay, it’s hard to discount a connection entirely.
A New Scientist report backed up what every experienced eBay user knows, or should know. Sniping, the practice of sending in a bid at the last possible second, is the strategy that works best for winning.
Mathematicians at Seoul National University in Korea studied more than half a million US and Korean eBay auctions, the report said. The scientists’ finding, as it appears in the July edition of Physical Review E? “Bidding at the last moment is a rational and effective strategy to win in an eBay auction.”
New Scientist also references a 2002 report by a pair of economists on Internet auctions. They also found, like the Koreans did, a “power law” exists where the latest bids tend to be the strongest performers.
The problem that we see with auction sniping, and have commented on before, concerns the detrimental effect it has on auctions, especially on the seller’s side. Buyers who may be willing to outbid a last-second snipe don’t get the opportunity online; once the auction ends, it’s over.
While that just deprives potential buyers of a win, it also takes money out of the seller’s pockets. To counter this, the “Buy It Now” option has come into heavier usage. Many sellers just go with that approach and accept a fixed price rather than risk a lowball bid scooping up a bargain.
Online services like AuctionSniper.com can even the playing field for buyers. They place bids automatically in the closing seconds of an auction, which means buyers don’t have to stay awake into the wee hours of the morning to follow the bidding on a late-closing auction.
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David Utter is a staff writer for Murdok covering technology and business.
